AmCham Macedonia Winter 2014 (Issue 40) - Page 7

ANALYSIS
In November 2013, Macedonia signed a construction
deal for two other major highway stretches with the
Chinese company Sinohydro Corporation Limited.
The first 50-kilometre stretch of this motorway will
link Skopje (and therefore Corridor 10) to Stip, a significant national economic hub. Construction on this
project should start by mid-2014. The second highway segment will eventually form part of Corridor
8. This 57-kilometre highway will link the important
lake resort town of Ohrid to Kicevo (now separated
by impassable mountains), greatly improving the trip
from Skopje to Ohrid.
After initially failing to find a company that would
build the two stretches in exchange for toll concession rights, the Macedonian government decided to
raise a loan worth €574 million from the Chinese Export-Import Bank. However, the loan terms include
the obligation that at least half of the construction
services and materials be Chinese. This loan marked
the first serious attempt by the Macedonian government to tap into the €10 billion in Chinese funds earmarked for transport projects in this region.
But the government is not entirely abandoning the
idea of finding companies that would build and operate parts of its highways. The International Finance
Corporation is currently advising the government
on preparing a tender for two additional highway
stretches: 1) the 35 kilometer long highway stretch
from the western town of Gostivar to Kicevo, part of
Corridor 8 and 2) the 13 kilometer long highway leading from Skopje to the border with Kosovo.
The only missing piece of this puzzle at this stage is a
plan to build the stretch of Corridor 8 that would link
Kumanovo with the Bulgarian border.
A new highway will draw
Macedonia & Kosovo closer
Just last month, Kosovo created a short-list of companies (including U.S.-Turkish venture, Bechtel-Enka, which recently completed Kosovo’s first highway,
from Pristina to the Albanian border) to eventually
build the 65-kilometre stretch of highway running
from Pristina to the Macedonian border. As Kosovo
moves closer to awarding a tender, the Macedonian
government signaled has echoed its intention to
complete a much shorter, 13 kilometer, stretch from
the border to Skopje. While the Kosovo part of the
Emerging Macedonia Winter 2014 Issue 40
highway will cost some €600 million, the Macedonian stretch will cost an estimated €70 million.
The Macedonian Transport Ministry recently signed a
consultancy contract with the IFC, to prepare a tender to begin the selection process of a company that
would eventually build and operate this road. The
Transportation Ministry signaled it is likely to release
the tender after the presidential and early parliamentary elections now scheduled for mid April 2014 and
should be built by 2018 at the latest.
The new road is expected to significantly boost
trade relations between the two countries, Kosovo
being one of the few countries with which Macedonia maintains a significant trade surplus, especially
in agricultural and oil products. The volume of trade
between the two countries reached some €300 million in 2012. The motorway will also ease the sale of
services to Kosovo residents who already regularly
travel to Macedonia for medical, retail, educational,
tourism and other services.
Reviving rail
After more than 30 years of virtually zero investment
in its railways, Macedonia launched a major project
in 2012 to reconstruct the most battered lines as part
of Corridor 10. EBRD is financing the €17.6 million
project, which is aimed at boosti